Rs 1,165 crore expected: Concor’s institutional portion oversubscribed

If all the shares are sold, it will fetch the exchequer Rs 1,165 crore, at the minimum price, a 2.58 per cent discount over the price of Rs 1226.65 at which the stock closed on Tuesday.

By: ENS Economic Bureau | Mumbai | Published: March 10, 2016 1:45:46 am

The offer for sale (OFS) of the state-owned Container Corporation of India (Concor) saw a good response on Wednesday with the issue being subscribed more than twice. Bids were received for over 15.7 million shares for the 7.79 million shares on offer. Wednesday’s sale was meant for institutional investors and high net worth individuals.

The government has decided to sell a 5 per cent stake in the logistics player or the equivalent of 9.75 million shares at a minimum price of Rs1,195 apiece. On Wednesday the Concor stock closed at Rs1,195.55 on BSE.

If all the shares are sold, it will fetch the exchequer Rs 1,165 crore, at the minimum price, a 2.58 per cent discount over the price of Rs 1226.65 at which the stock closed on Tuesday.

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The OFS which started on Wednesday for only non-retail investors will end on Thursday, March 10. Retail investors, to whom the issue was not open on Wednesday, will be allowed to subscribe for over 1.94 million shares on offer on Thursday.

The government currently holds about 62 per cent stake in the logistics support provider (under the administration of the railway ministry). Post the OFS, the stake will stand reduced to 57 per cent. This is also the seventh disinvestment in FY16 and will help government inch towards the revised disinvestment target of Rs 25,000 crore.

In the quarter ended in December 2015, Concor reported net profit of Rs 206.12 crore, down 31.54 per cent year-on-year. In FY15 the firm reported a consolidated net profit of Rs1054.58 crore, up 11.68 per cent. “Markets were very choppy both today and yesterday but still we got subscription of over 2 times. There was wide participation from all segments of institutional buyers,” Disinvestment Secretary Neeraj K Gupta said. While foreign institutional investors bids for 40 per cent, insurance companies, both LIC and private insurers, bid for 125 per cent of the shares on offer.

“We expect a good response from retail investors tomorrow,” Gupta said. FE & PTI

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